Are We Ready For Blockchain In The Art World

Are We Ready for Blockchain in Art?

Are we really ready for Blockchain in the art world?

Each
week I write a brand new article to support members of our three wonderful
groups on Facebook, The Artists Exchange, The Artists Directory, and The Artist
Hangout. This week we take a look at the emergence of crypto-currencies and
Blockchain which are starting to creep into the everyday norm of the art world.

A Brief History of Money…

Blockchain and cryptocurrency is
something we have all heard about and many of you are probably still wondering
exactly what these technologies are and worried that it all seems a little too
complicated. That’s little wonder when we listen to some pundits on the subject
who often suggest that we will have no choice other than to begin understanding
it sooner rather than later as both Blockchain technologies and cryptocurrency
takes on more of a role in the world of art.

I know I will take a lot more
convincing before I believe that the majority of working artists of today will
be converts to cryptocurrency anytime soon but I am minded to believe that many
digital artists might make the jump to Blockchain technologies in the medium
term. You can pay me for my art however you want with the exception of paying
me in any currency like bitcoin. But then not too long ago I didn’t think I
would ever manage to go out of the house without taking any hard physical cash with
me either.

I can’t even think back to the last
time I used physical cash to pay for anything. I am so used to just tapping my
card on a chip and pin device or holding my phone up against a small box that
when I go a few pennies over the contactless payment limit I struggle to
remember my pin code. Some days I struggle to remember why I walked into the
bathroom.

I can’t say that I really miss
physical cash at all. It’s inconvenient when you have to find a bank or an ATM whenever
you do have to pay for something using hard currency, and that is if you can
find an ATM at all. When many of the free to use ATMs are being stripped out of
many high streets along with the banks, finding somewhere to get your hands on traditional
currency is becoming more and more of a challenge and in some towns and cities
it is becoming impossible.

Now if you asked me if I would ever
trust financial systems enough to pay for literally everything using only a
plastic card just a few years ago, I wouldn’t have been convinced that I would
ever be ready any time soon to go cashless. Yet last week I walked into a
coffee shop that no longer takes cash at all. They literally had no mechanisms
in place to handle it, and because the owner felt that it was safer for his
staff who had to take the money to the bank, and the bank had closed down
anyway.

Not too long ago a software update
to the banking system meant that my along with many others entire financial
status went offline for a few hours. Thankfully I didn’t need to buy or pay for
anything but there were many people who got caught out and restaurant bills
went unpaid, groceries were put back on shelves in supermarkets while the fix
was applied by the bank.

Glitches like this make the banking
world vulnerable. It only takes one rogue nation with the desire and a skill-set
that you can learn online to bring a country to its knees. There are lots of
protections in place of course and issues like this are still thankfully
relatively rare, but as the world heads towards using online services for
everything there is always that chance that a bad player can break something or
that the system gets a glitch. So it’s little wonder that there are still many
people who need to be convinced that this pay for everything by plastic thing
is the right way to go.

Social Media

That Facebook Thing…

On the 13th March 2019,
Facebook, What’s App, Instagram, and other sites went down for hours and it
felt to some like years. It was something unprecedented since the last time Facebook
went down for longer than a few hours. Facebook took to twitter to explain that
things had gone a little bit belly up but they were working on a fix and no, it
wasn’t a cyber-attack. No need to panic everyone, but of course a lot of people
did.

Facebook was down for the longest
period for a long time, some 14-hours and there was a definitive panic
spreading across twitter which we all know really is the tech support platform
where we go to find out if things have really gone down or to find out what
time Donald woke up. The outage was the longest on record and it was global
which gives you an idea of the scale. It looked like a hack, a well-constructed
carefully planned cyber-attack and you could almost hear blame being cast on a
couple of nations. Alas, the reason was more mundane.

The key flaw that caused this
outage to be so severe was an unfortunate handling of an error condition. An
automated system for verifying configuration values which ended up causing much
more damage than it fixed. I’m sure that there will be coverage of the
outage in the media who will be saying that we are all doomed and that this was
a hack, but no. It was a glitch. S.H. One. T, happens and in the world of tech, way more frequently than you would think.

The intent of the automated system
is to check for configuration values that are invalid in the cache and replace
them with updated values from the persistent store. This works well for a
transient problem with the cache, but it doesn’t work when the persistent store
is invalid. Long story short and to put the geekiness to one side, this meant
that every time a user tried to enter a query into Facebook, Facebook
re-entered a feedback loop that wouldn’t allow the databases to recover. And
yes I noticed that certain ads didn’t disappear as well.

I expect if everyone had just
stopped using the service instead of refreshing the page or trying to post or
log in and out, this could have been handled more efficiently and the outage
would have been much shorter. Turning off the system which attempted to correct
configuration values is the approach they have taken for now according to their tech pages, but at some point
that system will need to be reintroduced and replaced with a system that
handles this stuff more gracefully. This kind of error could happen again and
at some point it probably will and it’s not only Facebook that needs to have
this kind of system in place.

So not a hack, or an attack, the
data was essentially sort of trying to delete itself after a misconfiguration.
Something I have seen happen in my other life outside of art and that’s the
thing, this kind of stuff does happen and usually if it can happen it will at
some point.

Which kind of tells you that
whatever the service is, it doesn’t have to be maliciously attacked to bring it
down. The internet is both resilient and tragically fragile and it is also now
30-years old with some of it being still held together with similar
technologies that were put in place all those years ago, but also fragile
because of the way it is used or more specifically because of the way it is frequently
misused.

As an aside and because ooh, shiny, do you want to see what every website
looked like back in the day? Check out the Internet Archive’s Wayback Machine
right here. You
can even look at older versions of this site. Back to it then.

With so many of us artists needing
to be online and having very little if anything in the way of an offline
strategy for running our businesses, we are just as vulnerable to these kinds
of issues as the biggest internet players. Why? Because we are all intrinsically
linked to them and we have an unhealthy reliance often on services which are
provided for free, which is something we forget when we use services like Facebook. We don't pay, we just complain when it all goes wrong. So back to bitcoin and you will start to get the feeling why I become slightly
nervous when it comes to mixing this kind of technology with art.

Cryptocurrencies which you probably
know as something like Bitcoin aren’t new. Back in 2009, the first
decentralized cryptocurrency, bitcoin, was created by a by pseudonymous
developer by the name of Satoshi Nakamoto. In 2018 there were more than 1600 of
these cryptocurrencies available and new ones can be created at any time, pretty much by anyone with the technical know-how. Even I created one where you can pay me in coffee and Pringles but it never really took off.

Happy Birthday Dear Internet...

Cryptocurrencies and Blockchain are
the two things we will look at today and I will try my best to provide a simple
explanation of what they are. To keep things really simple, they are both a bit different.
Blockchain is the platform that drives currencies such as bitcoin and the other
cryptocurrencies. Bitcoins and the like are the currencies themselves but both cryptocurrencies and Blockchain have a symbiotic relationship with each other.

Why does this have anything to do
with art? Tech savvy collectors are now using cryptocurrencies to buy new
works. For the art world which is already so often accused of being more opaque
than transparent it was probably inevitable because unlike cash and credit
cards and other forms of payment, cryptocurrency is private. Blockchain
technologies on the other hand can also be used not to mask but to
categorically prove who the transaction was made with.

A lot of people think of
cryptocurrencies as being something dark and sinister and a way of masking the
origin of money. In essence, they are the currencies of choice for those whose
work involves kidnapping or anything of a criminal nature, or at least they are
if the criminal is tech savvy enough to know how to use them. Also worth
mentioning at this point that criminality and kidnapping are frowned upon to the
point of being illegal in most countries, so neither are great career choices
if you were thinking of making a career change.

Cryptocurrencies aren’t directly
affected by laws, rules or regulations of any government or bank, but equally
that means that there are also no credit card fees and surcharges. There’s
always an upside to these things I guess.

The public’s trust of
cryptocurrency is growing in some areas and whereas a traditional account can
be frozen, it’s slightly more difficult to freeze a cryptocurrency account.
But, it is still entirely possible and back in January this year users were
unable to access cryptocurrency through Quadriga, a platform which allows
trading through bitcoin and other currencies when the platform was frozen after
the CEO had passed away. Sad and bad news on both counts because he was the
only person with the password.

Where does it all fit in with art?

Obviously these systems have some
advantages and in the art world they become a more attractive proposition in an
industry which back in 2017 was worth more than $63-billion. The technology and
cryptography around Blockchain will speed up the movement of money, and it will
also make it easier to prove ownership of an asset which in this case would be
a work of art.

Anyone who has had to work on
finding out provenance of an artwork and tracing back ownership will see this
as a step forward that will reduce both the time and effort to accomplish tasks
such as due diligence. Today proving provenance relies on handling massive
amounts of paperwork and in some cases trusting someone who tells you that the
uncle of a friend of a friend once owned the work. Due diligence work when you
are looking at art and antiquities is specialised, laborious, and filled with
caveat after caveat.

This is why art fraud and
mis-attribution is so ripe within the industry, because it relies on trust and
paper. People can lie and paper can be forged. In theory, the Blockchain technology
could even open the art world up to more buyers if the task of due diligence made
it easier to prove provenance and ownership.

Blockchain technology certainly has
the potential to counter some of the issues that arise as a result of these
kinds of nefarious practices. The technology is one that has the potential to
guarantee the chain of ownership from creation to sale and every sale
thereafter. With some of biggest names of the art world increasingly showing an
interest, it is no longer a theoretical it might happen in the art world someday,
because what was only theoretical eighteen months ago is already is happening.

Last year, Christie’s piloted a Blockchain
encryption based registration service for the Barney A. Ebsworth collection in
New York. Working with the art registry service Artory, they created a digital certificate for the collection
including works from Edward Hopper and Georgia O’Keefe.

Whilst bitcoin is credited with
blurring the lines of identity, Blockchain can actually make the transaction
more transparent. In the case of these digital certificates everything from the
price to the description of the artwork and provenance was available. In short,
Blockchain can offer the kind of provenance security that has been forever
missing forever in the art world. The criminal’s once best friend is turning
and is being used for good.

There will still however need to be
some kind of manual provenance that I would suggest needs to absolutely be
categorically correct and which needs to take place prior to the work becoming
linked to the Blockchain certificates. This will slow the initial process down
to somewhere similar to the time it takes today, but in the future that same
provenance won’t ever need to be carried out in the same level of detail again
so long as the Blockchain technology remains uncompromised.

This also opens up another avenue
for part owning artworks. In this instance the physical artwork becomes a
currency which because of arts transient monetary nature, it likely has a close
fit with. At this point and particularly where multiple people could buy into
an artwork, because the investment could fluctuate in value in line with the
market, art becomes more akin to a financial instrument. We might just start to
see financial brokers and not just art brokers and the point where if one party
wishes to liquidate a fraction of the artwork they currently hold they would be
able to do it. It is at this point that art becomes more of an investment
opportunity than some of it is today.

But how does it work?

It’s not that complicated. An
artist creates a new work of art, a collector sells one of his paintings, or a
gallery makes a sale, it doesn’t matter at all because the seller will certify
everything that needs to be certified with digital credentials in the form of a
token or Blockchain.

That token or Blockchain is essentially a digital
certificate of authenticity and one that is worth much more than the paper
based certificates of authenticity that themselves are often worth little more
than the paper they are written on. Like this certificate I downloaded from the internet.

Courtesy of Arty Boll#&ks

Once the transaction has taken
place the artwork along with the validated certificate is handed to the buyer,
and this continues to happen each time the artwork is passed on. Because the
transactions are stored on something called a distributed ledger which anyone
can edit and access, buyers and sellers can see the exact journey of the
artwork. If the certificate doesn’t start off with a link to the artists,
galleries, or seller’s crypto-wallet the question of provenance determines that
the work is fake or that there is something amiss.

So why is this useful?

The most obvious use of this
technology is that it can at last add some transparency to art transactions and
it can be used to quickly check the provenance and carry out much of the due diligence
needed when buying a work of art.

But there are also practical uses
for transitioning art through the system too. Digital art is notoriously
difficult to prove to be an original. I know because I have battled with the
concept for many years and in some case have even sent the original disc drives
where the art has been stored to the buyer. The problem here is that discs can
be copied and there is no easy way to guarantee that they haven’t.

Whenever I have sold original
digital art in the past it has always been a case of sending over the file and
every file used throughout the creation on an encrypted USB device and
physically signing the artist proof and any prints. But that system relies on
trusting that the artist never sells that file somewhere else. You can trust
that I won’t but then everyone could say that too.

With Blockchain it becomes
impossible to pass off a second copy of the work as the original. Everything
points back to the big bang, the moment of creation, and it is time stamped and
where other parties in the chain continue to endorse the credentials of the
work through constant re-verification.

It is entirely feasible that this
would one day allow digital art to even be rented and ensure that the artist
receives a due commission. Organisations such as Codex who you can find right
here are
already working to solve a multi-billion dollar problem of art and antiquities
sales where due diligence is usually another level of friction and often pain. Been there, done that, never want to wear that particular T-Shirt again.

You can also see where this model
could be used to prove the provenance of anything that carries a value. Car and
yacht sales which would reduce criminality and ringing stolen cars and boats,
digital credentials which we also spoke of recently and where training has to
be certificated and validated, maybe Blockchain the credentials of a Doctor who
will perform surgery, the practical uses for Blockchain are clear. For digital artist
it is the only guaranteed way that currently exists to guarantee an original
digital work of art is the original.

Is it any riskier in terms of
glitches? Well it isn’t as risky as many of the current technologies that we
rely on to provide certification, and where transactions need to be proven it
is much better and more difficult to fool. Some would say impossible but I have
been around the cyber-block for a long time and eventually things become easier
to tamper with but this is about the best we have and will have for a while.

Simple explanation of Blockchain technology

So back to the question…

The question isn’t are we ready for
Blockchain technologies to creep into the art world because they are already
here. The question is really, are we preparing for the time when Blockchain
becomes as familiar as using a credit or debit card to purchase a piece of art?

It seems a long way off in the
distant future but this technology has been growing since the beginning of this
decade to the point that we are now seeing it happen and yet as working artists
some of us will still only just be starting to get to grips with handling
online payments. It seems a million miles away but so did television and mobile
phones at one time.

What we are likely to see in the
future and not even the long-term future is a time where the fractional
ownership of art becomes more attainable and just as attainable as the ownership
models some aircraft manufacturers have been encouraging for years with their
own fractional ownership programs. Twenty people buy the use of an aircraft and
the person who has the most invested gets the aircraft for the most time and
each share a proportionate cost of keeping it in the air.

Art was tokenised for the first
time in 2018 and no matter which tech-summit you attended last year, there was
always at least one breakout session at every summit where the subject of
Blockchain was being discussed. With art prices soaring through the roof in the
auction rooms on a Tuesday evening, it makes sense that this is exactly the
kind of technology that will start to become more and more disruptive and more
and more common and along with it we will see new kinds of investors. The art
market will change as a result or at least how art is purchased and owned will
eventually change. We might not like it now but we might be forced down that route one day.

At the same time there is a sadness
that art is being seen by some as nothing more than a monetary instrument, but
the reality is that it has always been seen that way. I doubt that most working
artists who are running even some of the most successful online and print on
demand stores will need to worry too much immediately, but it certainly makes
you think about where we will be in another decade. Of course, that’s so long
as it doesn’t all come crashing down due to a technical glitch because you
know, technology.

About Mark…

I am an artist and blogger and live
in Staffordshire, England. You can purchase my art through my Fine Art America
store or my Pixels site here: https://10-mark-taylor.pixels.com

Any art sold through Fine Art
America and Pixels contributes towards to the ongoing costs of running and
developing this website. You can also view my portfolio website at https://beechhousemedia.com which you should totally check out because soon it will include free art downloadable's that you will be able to print at home!

Mark Taylor is a professional artist and blogger who supports other independent visual artists and creatives.
His work is sold online through Fine Art America, Pixels, and Zazzle, and through more than 150 retail locations across the USA, Canada, and the UK